The Philippine economy hit its slowest growth pace in more than three years at 5.2 percent in the first quarter of 2015, largely due to government underspending, official figures released Thursday show.
Growth in gross domestic product (GDP) in January to March this year slackened from a revised 6.6 percent achieved in the preceding quarter and 5.6 percent recorded in the comparable year-earlier period.
The 5.2 percent rate was also the slowest since the fourth quarter of 2011, when GDP growth ran at 3.7 percent.
Data released by the National Economic and Development Authority (NEDA) and the Philippine Statistics Authority (PSA) also showed the first-quarter performance of the economy fell below the median forecast by private analysts for the three-month period.
Economists from private banks had expected GDP growth in the period would hit at least 6 percent, while the International Monetary Fund had predicted it would step up to 7.3 percent.
The PSA report showed that the services sector lost momentum to 5.6 percent from a 6.8 percent surge a year earlier, although it remained the major growth driver.
Industry, on the other hand, gained pace to 5.5 percent from 5.4 percent. The expansion in the agriculture sector accelerated to 1.6 percent from 0.6 percent.
Govt underspending drags overall growth
The NEDA told a press briefing that while growth in the private sector remained robust, the slower-than-programmed pace of public spending, in particular the decline in public construction, dragged overall growth in the economy.
Growth in government consumption expenditures reached 4.8 percent in the quarter from 1.9 percent a year earlier, the PSA report said.
Public construction slumped 24.6 percent during the quarter, reversing a 17.5 percent expansion a year ago.
Socioeconomic Planning Secretary and NEDA Director General Arsenio Balisacan said a recent uptick in disbursements from the Department of Budget and Management has yet to be reflected in the national income accounts.
“The growth performance in this quarter tells us that there are still issues that the government needs to confront in order to maintain the high level of confidence that the business sector is showing and entrusting the country,” he said.
With this, Balisacan said the government is carefully watching the spending performance of the various relevant agencies to ensure that implementation bottlenecks are being addressed and the execution of programs and projects are not delayed any further.
He also reiterated the country needs to continuously take on the high growth path while ensuring it is sustainable and inclusive.
“We are also hopeful that through the effective facilitation of programs and projects on poverty reduction and employment generation, we will be able to reach the targets that we have set until the end of this Administration,” the NEDA chief said.